RNS Number : 6998V
China Eastsea Business Software Ltd
02 June 2008
China Eastsea Business Software Limited
(AIM: CESG)
£1.9m acquisition of INFA Group
China Eastsea Business Software Limited ('China Eastsea'), which provides information technology and business process outsourcing services, announces that it has acquired Infa Hong Kong Group Limited ('INFA Group') for a total maximum consideration of HKD 28.9m (c. £1.9m). INFA Group is a profitable, growing business and the acquisition is expected to be earnings enhancing.
INFA Group provides IT outsourcing services in the power and telecommunication industries focusing on Shanghai, Beijing and Zhejiang. The acquisition will increase China Eastsea's market share in the power and telecommunication sectors as well as complement their established presence in the petrochemical and government sectors.
The acquisition includes Beijing City Cash Business Service Limited Group, INFA Group's wholly owned subsidiary, and also includes parts of IT outsourcing business in Shanghai.
Financials
INFA Group, established in 2000, achieved profits after tax of £0.27m for the year ended 31 December 2007, an increase of 109% on the prior year, on turnover of £4.47m and net assets of GBP 0.14 million.
Consideration
The acquisition of the entire issued share capital of INFA Group is for a total maximum consideration of HKD 28.9 million (£1.9m) with an initial cash payment of HKD 17.4 million or RMB equivalent (c. £1.1m).
The remaining consideration payable is conditional on INFA Group achieving minimum profit targets for the years ended 31 December 2008 & 2009. The remaining consideration will be settled by the issue of up to 2,270,197 Ordinary Shares (which will represent 3.06% of China Eastsea's enlarged share capital), at an issue price of 33 p per share, as follows:
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60% of the shares, equal to £449,498 (1,362,118 Ordinary Shares) will be issued subject to INFA achieving a minimum profit after tax of HKD 5.05 million (GBP 326,860) for the year ended 31 Dec 2008; and
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40% of the shares, equal to £299,666 (908,079 Ordinary Shares) will be issued subject to INFA achieving a minimum profit after tax of HKD 7.0 million (GBP 453,519) for the year ended 31 Dec 2009.
Eric Zhu, Chief Executive of China Eastsea, said:
'This acquisition demonstrates the ability of this group to deliver on our strategy of acquiring successful business in major areas of China which reinforce our strong position in the petrochemical, government, telecoms and power sectors. The success of our strategy and this acquisition will give China Eastsea group a solid base in Shanghai, the financial centre of China, which will further enhance the visibility of the company's profile as well as access to financial market resources.'
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Contacts:
About China Eastsea
China Eastsea provides information technology and business process outsourcing services (ITO/BPO), IT consulting and a broad range of project work to clients in the petrochemical, petroleum, power and telecommunications industries, as well as to ministries, state authorities, municipalities, agencies and other organisations throughout the government sector in China. China Eastsea has a leading position in petrochemical/petroleum IT outsourcing market with Sinopec Zhenhai Refining & Chemical Company, one of the largest oil refining companies in China, as its biggest client.
The services provided by the Group include strategic planning, gap analysis, alignment, business and technology transformation, performance management and technology selection and optimisation according to best practices. The Group offers design, development, implementation, control and maintenance relating to the use, creation, installation or integration of software, hardware, networks, systems and technologies. It also provides total ERP solutions from design to development, implementation, training and maintenance.
The Group has proprietary technology on a management platform provided over internet, intranet and corporate portals, as well as on information integration. The Group has successfully leveraged its expertise in search engines and information management to build customised products to grow its government and telecommunications IT outsourcing market share.
This information is provided by RNS
The company news service from the London Stock Exchange
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